Exclusive: Tingo, MICT seeking US investment bank for Nasdaq listing

By David Whitehouse
Posted on Friday, 20 May 2022 10:24

Farmers drive tractors carrying freshly picked peaches to a market in Zaozhuang, Shandong
Farmers drive tractors carrying freshly picked peaches to a market in Zaozhuang, Shandong province, China June 12, 2019. Picture taken June 12, 2019. REUTERS/Stringer

Tingo and MICT, both in the midst of merging to create a agri-fintech company with a revenue of $900m, are seeking a major US investment bank to manage their planned listing on the US Nasdaq stock market, the CEOs of the two companies tell The Africa Report.

The companies are in contact with several large US investment banks to manage their listing as well as possible future acquisitions, says Darren Mercer, the current CEO of MICT. The new company is expected to have more than $200m cash on its balance sheet, and the aim is to complete the listing in the third quarter. “We need one of the larger banks supporting us,” Mercer says.

MICT provides fintech and financial services in about 130 cities in China. It has partnerships with the country’s main mobile phone networks, China Mobile and China Unicom, as well as with domestic banks and insurers. Mercer sees potential to adapt the agri-fintech model developed in Nigeria by Tingo CEO Dozy Mmobuosi for the Chinese market. The rural community in China remains “significantly underserved,” as do urban consumers, he says.

China still has only 200 million to 300 million consumers, based on a threshold of people able to spend $20 a day on non-essentials, according to Jerry Wu, manager of the China Stars Fund at Polar Capital in London. That leaves 600 million to 800 million people predominantly rural on low incomes.

The Chinese government’s priority is to enable as many of them as possible to join the middle class. Tingo’s model has “plenty of legs” to contribute to that aim, Mercer says.

Tingo’s digital platform provides market access for farmers and cooperatives to sell their produce. The platform processes over 500,000 transactions a day, for products such as grain, corn, yam, beans and cassava. It also offers services such as settlement, brokerage, escrow, storage and logistics, with payments sent and received from Tingo Mobile wallets. Most of its 10 million customers are in Nigeria.

  • Mercer will become CEO for Asia under the merger, and will be mainly based in China.
  • Mmobuosi will lead the new company, which is likely to keep the Tingo name.  He aims to expand the company’s presence into unnamed new African markets. “Africa remains our number one objective,” he says.

Super app

Mmobuosi recently launched a “super app” to combine services which he plans to roll out across Africa. Research from Sturgeon Capital has argued that super apps are well suited to frontier markets as smart phones with limited functions make it impossible for many consumers to install multiple apps.

The new company will be large enough to be on the radar of institutional fund managers for whom Tingo or MICT individually would be too small, Mercer says. The new company’s ability to provide food security in the context of global food price inflation will help to attract institutions, he argues.

  • A further aim is to enable African farmers to access China as an export market, and offtake discussions are currently taking place, Mmobuosi says.
  • The logic of the merger is that both MICT and Tingo need a local partner to be able to access a large new market, he adds.
  • The aim is for the new company to become a “global player” in agri-fintech, Mmobuosi says. “Tingo is all about food security.”

Bottom line

Tingo and MICT are convinced they can crack African and Chinese agri-tech markets together.

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